Overview

Smoke signals: Declining cigarette use will shift industry's focus to smokeless products

The Cigarette & Tobacco Manufacturing market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

REPORT SNAPSHOT

Industry Threats & Opportunities

  • Demand for industry products such as smokeless tobacco helped mitigate declining sales of cigarettes
  • Major companies underwent significant structural changes to adapt to falling demand for traditional tobacco products
  • To combat antismoking campaigns, operators are developing new products

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    Industry Analysis & Industry Trends

    Over the past five years, the Cigarette and Tobacco Manufacturing industry has persevered despite facing challenging operating conditions and intense scrutiny from both the government and the public. Federal excise taxes on cigarettes rose, and individual states increased their own excise taxes on tobacco several times over the current period. Meanwhile, cigarette consumption continued to decline steadily, further reducing demand for the industry's largest and most profitable product segment. Over the next five years, rising public scrutiny and an increasingly stringent regulatory environment, as well as ongoing class action suits against major tobacco manufacturers, will continue to tarnish the image of tobacco, accelerating the decline of this industry...

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    Industry Report - Industry Investment Chapter

    The Cigarette and Tobacco Manufacturing industry exhibits a high level of capital intensity. Using wages as a proxy for labor costs and depreciation as a proxy for capital, IBISWorld estimates that for every dollar spent on labor, industry operators will spend $0.37 on capital expenditures in 2017. Depreciation costs have remained relatively steady over the past five years, as few industry operators purchased new machines to boost production efficiency. However, wage costs have significantly declined due to the falling number of employees in the industry. Particularly, both Reynolds American and Imperial brands have consolidated operations at their production facilities by reducing headcount. Overall, wages as a share of industry revenue has reached a low of 1.9% in 2017. Inc..

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    Additional Insights for the Cigarette & Tobacco Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cigarette & Tobacco Manufacturing Industry are

  • Economies of scale
  • Ability to effectively change community behavior
  • Marketing of differentiated products
  • IBISWorld analysts also discuss how external factors such as Percentage of smokers and Excise tax on tobacco products in the Cigarette & Tobacco Manufacturing industry impact industry performance..

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    Industry Products

    What is the Cigarette & Tobacco Manufacturing Industry?

    Operators in this industry manufacture cigarettes, cigars, loose pipe tobacco, smokeless (i.e. chewing) tobacco and e-cigarettes. Tobacco manufacturers acquire raw materials from tobacco growers, paper and fiber manufacturers, tobacco stemmers and tobacco redryers and process these into ready-to-use products sold to wholesalers and retailers.

    Industry Products
    Regular cigarettes
    Menthol cigarettes
    Smokeless tobacco
    Cigars
    E-vapor products
    Industry Activities
    Manufacturing cigarettes
    Manufacturing cigars
    Manufacturing smokeless tobacco
    Manufacturing electronic cigarettes and vaporizers for tobacco use
    Reconstituting tobacco

    Table of Contents

    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    Executive Summary
    Key External Drivers
  • Percentage of smokers
  • Excise tax on tobacco products
  • Regulation for the Cigarette and Tobacco Production industry
  • World price of tobacco

  • Current Performance
  • Industry consolidation
  • Profit expansion
  • Regulatory challenges and rising public scrutiny
  • Chart: Revenue Growth

  • Industry Outlook
  • Product innovation
  • Diminishing social acceptance
  • Profit margins
  • Table: Cigarette & Tobacco Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cigarette & Tobacco Manufacturing Industry Lifecycle vs The Economy

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Grocery Wholesaling
  • Cigarette & Tobacco Products Wholesaling
  • Supermarkets & Grocery Stores
  • Convenience Stores

  • Key Selling Industries
  • Paper Mills
  • Seasoning, Sauce and Condiment Production
  • Tobacco Growing
  • Wood Pulp Mills

  • Products & Services
  • Regular cigarettes
  • Menthol cigarettes
  • Smokeless tobacco
  • E-vapor products
  • Cigars
  • Other
  • Chart: Cigarette & Tobacco Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
  • Social norms
  • Price

  • Major Markets
  • Candy and tobacco wholesalers
  • Broadline grocery distributors
  • Other retail stores (e.g. convenience stores, drug stores)
  • Supermarkets and grocery stores
  • Other
  • Exports
  • Chart: Major Market Segmentation for the Cigarette & Tobacco Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Competitive Landscape
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesMarketingOther
  • Chart: Cost Structure Benchmarking – Sector vs Cigarette & Tobacco Manufacturing

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cigarette & Tobacco Manufacturing Industry

  • Industry Globalization
    Major Companies
    Altria Group Inc. Reynolds American Inc. Imperial Brands plc
  • Table: Altria Group Inc. - financial performance
  • Table: Reynolds American Inc. - financial performance
  • Table: Imperial Brands plc - financial performance

  • Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the Cigarette & Tobacco Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Key Statistics
    Table: Industry Data for the Cigarette & Tobacco Manufacturing Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)
  • Percentage of smokers (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Jargon & Glossary
    Cigarillo
  • A small and narrow cigar that is often wrapped in leaf tobacco (not paper)
  • Curing
  • The process of regulating temperature and humidity conditions for freshly harvested tobacco leaves.
  • E-Vapor
  • A broad category of electronic nicotine delivery systems (ENDS) that includes e-cigarettes, larger vaporizers and their accessories.
  • Electronic Cigarette
  • Electronic cigarette is a battery-powered device that contains a nicotine-based liquid that is vaporized and inhaled, simulating the experience of smoking a traditional cigarette.
  • Menthol
  • A chemical derived from the peppermint or spearmint plants. Menthol naturally has a cooling effect, which can help reduce the harshness of tobacco smoke.
  • Reconstituted Tobacco
  • Tobacco made from the pulp of mashed tobacco stems and other parts of the tobacco leaf that would otherwise be waste that are then sprayed with nicotine and other substances lost during processing.
  • Snus
  • A type of moist powder tobacco consumed by placing it under the lip for extended periods of time.
  • Why buy this report?

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Cigarette & Tobacco Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cigarette & Tobacco Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Cigarette & Tobacco Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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